Chapter No. Page No. 2 22 Export Management INDIA’S EXPORT TRADE HISTORICAL PERSPECTIVE � INDIA HAD A GLORIOUS EXPORT TRADITION. � INDIAN SPICES AND FINE CLOTH WERE EXPORTED OVER CENTURIES TO THE EAST AND THE WEST. � EVEN WITH THE LIMITATIONS IMPOSED BY THE CIRCUMSTANCES, INDIA'S EXPORTS AMOUNTED TO RS. 300 CRORES IN 1920s. � IN THE FIRST YEAR AFTER INDEPENDENCE OUR EXPORTS WERE AMOUNTED TO RS. 400 CRORES.
Chapter No. Page No. 2 22 Export Management INDIA’S EXPORT TRADE TRENDS � A MAJOR AND SIGNIFICANT STEP TO BOOST THE EXPORTS WAS THE STEP TAKEN TO DEVALUE THE INDIAN RUPEE IN 1966, TO MAKE THE INDIAN PRODUCTS MORE COMPETITIVE. � SIMULTANEOUSLY A NEW EXPORT-IMPORT POLICY WAS BROUGHT IN, TO HELP EXPORTERS TO INCREASE EXPORT PRODUCTION. � THE TREND FROM 1967-68 TO 1972-73 SHOWS THAT: o THE IMPORTS FELL FROM RS.2,008 CRORES TO Rs.1,861 CRORES. o EXPORT ROSE FROM RS.1,193 CRORES TO RS.1,971 CRORES. CONT…
Chapter No. Page No. 2 23 Export Management INDIA’S EXPORT TRADE TRENDS � IN 1987- 88 EXPORTS INCREASED TO RS. 15,719 CRORES --- 25% RISE. � IN 1988- 89 INCREASED BY 28% AND � IN 1990- 91 INCREASED BY 17% WHEN IT WAS RS. 32,553 CRORES. (EXPORTS TO USSR ALONE AMOUNTED TO RS. 5,254 CRORES). � EXPORTS DWINDLED CONSIDERABLY AND IN THE YEAR 1992- 93 OUR EXPORTS TO ENTIRE EASTERN EUROPE INCLUDING RUSSIA AMOUNTED TO RS. 2,359 CRORES OUT OF A TOTAL RS. 69,548 CRORES, THIS SETBACK WAS RECOVERED QUICKLY. CONT….
Chapter No. Page No. 2 26 Export Management INDIA’S EXPORT TRADE TRENDS � SINCE IMPORTS OUTPACED EXPORTS, TRADE DEFICITS BEGAN TO BUILD UP STEADILY FROM 1979 - 80. � DUE TO SOLID INCREASE IN THE EXPORTS OF SERVICES AND ALSO DUE TO FOREIGN INVESTMENTS IN INDIA, AND THE NON-RESIDENT INDIAN SAVINGS, THE TRADE BALANCE NOT ONLY BECAME POSITIVE, BUT STARTED BUILDING UP SIZABLE FOREIGN EXCHANGE RESERVES AND TOUCHED U.S. $ 100 BILLION BY THE BEGINNING OF 2004. CONT…..
Chapter No. Page No. 2 26 Export Management INDIA’S EXPORT TRADE TRENDS � REFORMS HAVE BEEN EXTENDED AND THE RUPEE HAS BEEN MADE FULLY CURRENT ACCOUNT CONVERTIBLE, ACCEPTING THE OBLIGATIONS UNDER ARTICLE VII OF THE IMF. � A NEW INDUSTRIAL POLICY WAS BROUGHT IN, WHICH CHANGED THE VERY CONCEPT OF REGULATED INDUSTRIAL LICENSING, FOREIGN INVESTMENT AND OWNERSHIP CRITERIA OF INDUSTRIES. � NEW EXPORT-IMPORT POLICY WAS MADE FOR A PERIOD OF FIVE YEARS, WHICH WAS QUITE LIBERAL, REDUCED RESTRICTIONS AND WAS EXPORT AND INDUSTRY ORIENTED.
Chapter No. Page No. 2 27 Export Management INDIA’S EXPORT TRADE TRENDS THE FOREIGN EXCHANGE BALANCE OF THE COUNTRY IS ARRIVED AT AFTER TAKING: � ALL THE INWARD REMITTANCES OF FOREIGN EXCHANGE, NRI REMITTANCES, TOGETHER WITH EXPORTS AND ON THE ONE HAND AND ALL OTHER FOREIGN EXCHANGE OUTGOES SUCH AS DEBT SERVICING, AND FOREIGN EXPENSE PAYMENTS THE COUNTRY HAS TO MAKE, AND THE IMPORTS ON THE OTHER HAND. � THE DIFFERENCE BETWEEN EXPORTS AND IMPORTS IS REFERRED TO AS TRADE BALANCE.
Chapter No. Page No. 2 28 Export Management INDIA’S EXPORT TRADE COMPOSITION OF EXPORTS EXPORTS ARE BROADLY CLASSIFIED INTO: � TRADITIONAL EXPORTS: INDIA HAS BEEN EXPORTING OVER A LONG PERIOD WHICH INCLUDES JUTE, TEA, COTTON FABRIC, CASHEW, SPICES AND COFFEE etc. � NON-TRADITIONAL EXPORTS: THEY ARE RELATED TO THE SECTORAL GROWTH IN THE ECONOMY AND THE INDUSTRIES OF THE COUNTRY AND INCLUDE PRODUCTS OF ENGINEERING GOODS, MARINE PRODUCTS, LEATHER PRODUCTS, CHEMICALS, TEXTILE GARMENTS, GEM AND JEWELLERY AND COMPUTER SOFTWARE etc.
Chapter No. Page No. 2 30 Export Management INDIA’S EXPORT TRADE DIRECTION OF EXPORT TRADE A KNOWLEDGE OF THE COUNTRIES TO WHICH WE EXPORT AND THE TREND OF THEIR INCREASE OR DECREASE IS IMPORTANT AND IT INDICATES: � THE DIRECTION IN WHICH OUR EXPORTS ARE GROWING AND GIVES CLEAR SIGNALS TO THE PLANNERS AS WELL AS INDIVIDUAL FIRMS OF THE POTENTIAL AVAILABLE FOR EXPORTS, OUR STRENGTHS AND WEAKNESSES AND ALSO THE UTILIZATION OF THE RESOURCES WE HAVE FOR MAXIMIZING EXPORTS.
Chapter No. Page No. 2 31 Export Management INDIA’S EXPORT TRADE DIRECTION OF EXPORT TRADE IT IS INTERESTING TO NOTE THAT: � OUR EXPORTS TO DEVELOPING COUNTRIES HAVE INCREASED FROM Rs. 7,965 CRORES IN 1990 - 91 TO Rs. 33,059 CRORES IN 1997- 98. � MANY OF THE DEVELOPING COUNTRIES HAVE COME OUT OF THE DEBT BURDEN OF THE EIGHTIES AND ARE FAST BECOMING OPEN MARKET ECONOMIES. � INDIA CAN CONCENTRATE AND INCREASE TRADE WITH THEM .
Chapter No. Page No. 2 31 Export Management INDIA’S EXPORT TRADE DIRECTION OF EXPORT TRADE THE FIVE COUNTRIES WHICH ALWAYS HAD A LEAD OVER ALL OTHER COUNTRIES IN OUR EXPORTS OVER THE YEARS WERE: � U.S.A. � OLD U.S.S.R. (NOW THE DIMINISHED RUSSIA). � JAPAN. � GERMANY. � U.K.
Chapter No. Page No. 2 34 Export Management INDIA’S EXPORT TRADE TEA TO PROVIDE RELIEF FOR THE SUFFERINGS OF PLANTATION GROWERS, WHAT IS REQUIRED IS TO TACKLE THE PROBLEM ON THE FOLLOWING LINES: � IN MANY TEA ESTATES THE TEA BUSHES ARE ALMOST CENTURY OLD, TO PHASE THEM OUT TO IMPROVE THE QUALITY A HUGE INVESTMENT IS REQUIRED. � DUE TO ONSLAUGHT OF SOFT DRINKS, AND LACK OF PROMOTION CONSUMPTION OF TEA HAS FALLEN, MEASURES TO PROMOTE TEA ARE NEEDED. � THE PRESENT SYSTEM OF TEA TRADING HAS TO BE MODIFIED TO ENSURE THAT THE AUCTION PRICES DO NOT FALL SHORT OF THE COST OF PRODUCTION.
Chapter No. Page No. 2 35 Export Management INDIA’S EXPORT TRADE COFFEE � INDIA EXPORTS PRACTICALLY 80% OF ITS PRODUCTION. � WE PRODUCE TWO IMPORTANT TYPES OF COFFEE- ARABICA AND ROBUSTA. � KARNATAKA PRODUCES 70%, KERALA AND TAMIL NADU 22% . IN THE EXPORT MARKET � INDIAN CONTRIBUTION IS HARDLY 5%. � BRAZIL - 40% , FOLLOWED BY COLUMBIA. � VIETNAM INCREASED ITS COFFEE PRODUCTION 11 TIMES IN THE LAST DECADE, IS RESPONSIBLE FOR THE FLOOD OF CHEAPER COFFEE OF LOWER QUALITY. � INDIA EXPORTED 184000 TONS OF COFFEE IN 2000-2001 OF Rs. 1185 CRORES.
Chapter No. Page No. 2 36 Export Management INDIA’S EXPORT TRADE TEXTILES � TEXTILES ARE IMPORTANT IN OUR EXPORTS AND HAVE TREMENDOUS POTENTIAL. � INTERNATIONAL TRADE IN TEXTILE AND CLOTHING HAS BEEN REGULATED SINCE 1974. � IN INTERNATIONAL TRADE WHERE IN SUCH A FREE TRADE SITUATION, THE COUNTRY SHOULD PREPARE FOR A LARGER VOLUME OF PRODUCTION, ESPECIALLY IN THE GARMENT SECTOR. � WITH THE DISMANTLING OF THE MFA AND THE QUOTA SYSTEM, THE RULES OF DOING BUSINESS IN GARMENTS EXPORT WILL CHANGE RAPIDLY FROM THE VANISHING QUOTAS AND DRAWBACKS TO THE INCREASED COMPETITION FROM THE OTHER COUNTRIES LIKE CHINA.
Chapter No. Page No. 2 37 Export Management INDIA’S EXPORT TRADE TEXTILES � THERE IS ALWAYS A DEARTH OF TRAINED PERSONNEL IN THE COUNTRY. � 15 YEARS AGO CHINA ENACTED A LEGISLATION TO WHICH ANY ENTREPRENEUR PUTTING UP A GARMENT FACTORY SHOULD EARMARK 5% OF THE INVESTMENT FOR TRAINING, WHICH IS TAX FREE. � NOW THEY HAVE TRAINED MAN POWER. � NO WONDER CHINA ACCOUNTS FOR 20% OF WORLD TRADE IN GARMENTS. � WE ARE WAY DOWN IN THE SCALE. CONT….
Chapter No. Page No. 2 37 Export Management INDIA’S EXPORT TRADE TEXTILES � THE PRODUCTION CAPACITY IN INDIA IS LOW. � KNOWING INDIA’S POTENTIAL AND CAPABILITIES, A LARGE NUMBER OF WESTERN BUYERS ARE ALREADY APPROACHING INDIA. � WAL-MART AND TARGET, RUSSEL CORPORATION, SEARS ROEBUCK ARE ALSO PROCESSING OF FINALIZING ADDITIONAL AS WELL AS NEW ORDERS FOR SUPPLY. � MANY OF THESE IMPORTERS ARE ALSO PLANNING TO HAVE JOINT VENTURES WITH INDIAN MANUFACTURERS. CONT….
Chapter No. Page No. 2 37 Export Management INDIA’S EXPORT TRADE TEXTILES � THE INDIAN GOVERNMENT SHOULD FORM A WORKING GROUP IMMEDIATELY TO LOOK INTO THE NEEDS OF THE GARMENT EXPORTERS BY WAY OF FINANCE, FACTORIES, INFRASTRUCTURE PORT/AIR FACILITIES etc. TO DISPATCH LARGE CONSIGNMENTS AND HELP THE INDUSTRY TO OVERCOME THE VARIOUS DRAWBACKS, AT THIS CRUCIAL JUNCTURE WHEN THE NEW DOORS ARE OPENED.
Chapter No. Page No. 2 38 Export Management INDIA’S EXPORT TRADE CARPETS � THIS IS A VERY INTERESTING SECTOR OF OUR EXPORTS. � INDIAN EXPORTS ARE HAND MADE AND HAND-KNOTTED, MILL MADE AND SILK CARPETS. � HAND MADE CARPETS CONTRIBUTE 75% OF THE TOTAL CARPET EXPORTS AND AMOUNTED TO Rs. 2433 CRORES IN 2001- 02. � IRAN THE TRADITIONAL SUPPLIER OF CARPETS HAS NOT BEEN ABLE TO FULFILL THE WORLD DEMAND. � WITH IRAN DISAPPEARING FROM THE MARKET, INDIA, CHINA AND TURKEY HAVE BECOME THE MAIN SUPPLIERS IN THE INTERNATIONAL MARKET.
Chapter No. Page No. 2 39 Export Management INDIA’S EXPORT TRADE ENGINEERING EXPORTS � IT IS AN IMPORTANT AND MAJOR COMPONENT OF OUR EXPORTS. � OUR EXPORTS WERE OF Rs. 16,375 CRORES IN 1997- 98, INCREASED TO Rs. 38,093 CRORES IN 2002- 03. AN INCREASE BY 130% OVER FIVE YEARS. � IN THE EIGHTIES AND NINETIES USA AND EUROPE DECLINED IN THE MANUFACTURING SECTOR DUE TO HIGH OVERHEADS AND LABOUR COSTS. � MANY OF THE INDUSTRIES TRIED TO SHIFT MANUFACTURING TO DEVELOPING COUNTRIES. � CHINA GOT THE LION’S SHARE DUE TO THE VERY LOW LABOUR COSTS AND GOOD INFRASTRUCTURE PROVIDED BY THE GOVERNMENT. CONT….
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